King primed for coal dust-up

Alistair Osborne

LUCKILY, Wal King is known as a corporate bruiser. The straight-talking Australian who built Leighton Holdings into the country's biggest engineering and construction firm during a 42-year stint, will need all his street-fighting nous.

King is the man proposed by Nat Rothschild as the new chairman of Bumi, the Indonesian coalminer riven by internecine warfare after a spectacular fallout between the billionaire financier and Indonesia's Bakrie family.

Things have come to a head after Rothschild, who created Bumi via a $3 billion deal with the Bakries, called an extraordinary general meeting to oust 12 of the company's 14 directors. They include chairman Samin Tan and chief executive Nick von Schirnding. The showdown is due next month.

Mr King, 68, doesn't mince words when asked why his team should be in charge. ''The board seem to me like a bunch of people stuck in a canoe being swept down a river watching the jungle go by,'' he says. ''They look to be frozen at the controls. They are either unable or unwilling to do what they should do in terms of their responsibilities as directors.''

Like Mr Rothschild, Mr King believes the board has done far too little to recover at least $1 billion of funds missing from Bumi's Indonesian assets - the row has contributed to a two-thirds fall in the share price.

In September, law firm Macfarlanes was brought in to investigate, but its inquiry has been met with claims and counter-claims of theft, email hacking and lies. Bumi said last week it could not publish the law firm's report due to concerns over the ''provenance'' of materials Mr Rothschild handed the board.

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Mr King does not buy that. ''There's a certain amount of posturing going on,'' he says. ''At the end of the day you just have to look at the related-party transactions and they are not kosher.

''Any thinking shareholder has got two choices - continue to watch their money evaporate or support a plan that sees the restoration of value.''

Mr King says he has had a positive reception from shareholders so far and reckons he has a ''good sporting chance'', not least because he is a new broom, without conflicts of interest. But isn't he just in Mr Rothschild's camp? ''I've known Nat for a few years, too long,'' he jokes. ''But in terms of my position I'm not a close associate of anyone.''

Mr Rothschild, with 18.2 per cent of the votes is up against a concert party restricted to a 29.9 per cent voting stake of the Bakries, Mr Tan and 9.8 per cent investor Rosan Roeslani.

In his 23 years as boss of Leighton, Mr King transformed the company from a $17 million business into one worth $8.5 billion. But he also earned a reputation for being one of Australia's best-paid executives. He left at the end of 2010 with a package worth $13.3 million and ''a retirement benefit'' of $12.6 million. That attracted controversy after the company fell to a $406 million loss in the year to June 2011.

But Mr King says he's ''not on any bonus scheme whatsoever'' for winning the EGM. ''I receive no fees. I only receive reimbursement of travel expenses,'' he says. ''I haven't asked for anything. Nor do I expect anything.''